Cartrade Tech

CarTrade Tech delivered a record-breaking Q3 FY25, with revenues reaching ₹193 crores, marking a 27% year-on-year growth. The company reported a Profit After Tax (PAT) of ₹46 crores and consolidated EBITDA surged by 98% to ₹50 crores. For the nine months of FY25, revenue grew 32% to ₹521 crores, and EBITDA increased 100% to ₹104 crores, demonstrating strong financial momentum across all business verticals.

The Consumer Group, comprising CarWale and BikeWale, saw its revenue increase by 38% year-on-year in Q3 FY25, leading to a 172% growth in PAT. This segment achieved a 35% margin, which management considers a benchmark for excellence. The growth is attributed to favorable market conditions where supply exceeds demand, and increased traffic, with monthly active unique visitors across all platforms reaching 79 million, and 95% of users coming organically.

The remarketing business, which had experienced sluggish quarters previously, delivered a 28% growth in revenue in Q3 FY25, reaching ₹63.64 crores. This segment also saw a 178% growth in PAT and 73% growth in EBITDA. Management highlighted that the improvement in repossession volumes, now contributing almost 50% of the segment's volume (up from 42%), was a significant driver for this comeback, with expectations for these volumes to sustain or grow.

OLX continued its growth trajectory, with Q3 FY25 revenue growing 16% to ₹52 crores and PAT reaching ₹14.68 crores, compared to a loss in the previous year. EBITDA grew 24%, and margins improved to 26% from 18% in the prior quarter. Management emphasized the 'limitless potential' of OLX, particularly in its non-auto segments like real estate, mobile phones, and electronics, viewing it as a 10-20 year growth story with ongoing product and sales initiatives.

The company noted that its growth in the consumer business is partly due to manufacturers and dealers increasingly relying on performance-driven digital advertising platforms like CarWale. This shift is particularly evident when sales are strained, as OEMs seek more direct and measurable results. The significant increase in consumer traffic, from 38 million to 49 million monthly active users in the consumer group, also contributes to this market share gain.

CarTrade Tech is actively working on various initiatives, including lending platforms for new and used vehicles, which are showing early traction, especially in two-wheelers. These initiatives aim to digitize the automotive industry and improve customer experience, though they are not yet significant revenue drivers. The company has also expanded its physical footprint with approximately 375-400 used car franchise stores (abSure/Signature and OLX outlets combined), strengthening its phygital model.

Management highlighted that the company's business model allows for margin expansion as revenues grow, with costs not escalating proportionally. The consolidated EBITDA margin improved to 28% from 18% last year, and the consumer group achieved a 35% margin. The company also noted a 37% reduction in quarterly ESOP costs to ₹2.79 crores, attributing this to the timing of stock issuance and a natural decline as costs mature.